Landlord to Paul Allen: (Yawn)
The owners of the Rose Garden arena certainly aren't in any hurry to appease whining Trail Blazers owner Paul Allen. Yesterday the NBA announced that it was giving up on trying to broker a new lease between Allen and the creditors whom he shafted when he took his arena corporation into bankruptcy two years ago.
You know what they say about payback.
I'm sure the creditors absolutely hate carrying the Rose Garden on their books as real estate that they own. They're not in the business of owning real estate -- they're in the business of making money lending against it. If and when a new Blazers owner comes along, they'll likely be relieved to cut some kind of new deal -- probably an outright sale of the building to whoever buys the team. But they're not going to knuckle under to Allen. If they did, every other borrower they have would see it as an open invitation to renegotiate its loan agreement. Allen's not getting a new lease, and he's not getting the building back at a bargain price.
As predicted here a month ago, the Blazers are going to have either a new owner or a new city very soon. There's some talk of taking the team itself into bankruptcy now, but that might conceivably mean that the arena folks or the City of Portland could get control over the NBA franchise. The league would never let that happen; it would probably take over the team instead.
Allen's people now say they've got a good conversation going with the city (presumably, the Portland Development Commission). If by that they're implying that they're going to be bailed out by the city's taxpayers, they're fooling themselves, trying to fool prospective buyers or the league, or all of the above.
So long, Paul. As much as we want to keep Portland weird, it's not your kind of weird that we're after. (Via Couv Operator.)
| Posted at 4:27 PM | Permalink |
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Comments (8)
Public ownership of the Blazers!
All games to be preceeded by a twelve hour visioning process. The first six hours of which will be devoted to deciding the logo. Grant writers, please send your applications to 1 Winning Way, Portland, OR.
Posted by Sirajul | March 31, 2006 5:00 PM
Why didn't I think of this earlier? Each Trailblazer should file for city council. Next home game, Steve Patterson gets each fan to write a $5 check which can be exchanged for a small bag of peanuts. Assuming 12,000 fans show up, the checks could be turned into the city for $1.8 million that could be forwarded to Vulcan for political consulting. That would be a down payment for Voter-Owned Basketball. Who says Portlanders can't think creatively?
Posted by Bill Holmer | March 31, 2006 5:42 PM
Steve Patterson gets each fan to write a $5 check which can be exchanged for a small bag of peanuts.
Bill, I know you're being funny -- but that would be illegal. Nothing of value to be exchanged for the $5.
Posted by Kari Chisholm | April 1, 2006 6:46 AM
Jack:
If Allen takes the team into bankrupcy, guess who the team's biggest creditor is? Yep, Paul Allen!
So, the scam is to take the team bankrupt, get it back as primary creditor, and all the problems with the bad arena deal and the exclusive site agreement magically disappear!
Allen would then be able to move the team to another city where he could wear out his welcome.
Posted by JRA | April 1, 2006 7:04 PM
Debts owed by a corporation to its controlling shareholder usually get subordinated to those owed to other creditors. I doubt such a scheme would have a chance of working. But that's not to say old Paul doesn't think it will work. He's, ahem, been wrong before.
Posted by Jack Bog | April 1, 2006 7:17 PM
Jack:
There are no other creditors(at leastofsignificance.) Allen would be first in line.
Posted by JRA | April 2, 2006 10:05 AM
What are you talking about? The players would have claims for tens of millions, and the arena would have a huge claim on the defaulted lease.
Posted by Jack Bog | April 2, 2006 1:52 PM
Steve Patterson gets each fan to write a $5 check which can be exchanged for a small bag of peanuts.
Bill, I know you're being funny -- but that would be illegal. Nothing of value to be exchanged for the $5.
Just get the signatures. Then Vulcan can pay the $5/signature for 1,000 signatures, or $5K per Blazer, call it seed money, and receive $145K per Blazer from City taxpayers. With 15 players allowed on the roster, Vulcan pays $75K and gets back $2.175 million. That's a 29-to-1 payoff for the primary.
Here's the upside on the general. When there are 2 positions up like this year, and Vulcan sends 4 Blazers to the runoff, that could be another $800K, making the payoff $2.975 million, or about 40-to-1.
You know, it may look like a no-brainer but I just don't think it pencils out. Even over the course of several cycles. It's simply not a good enough public-private partnership payoff. Rewrite the Free Money deal so Vulcan gets as good as Dane & Williams condos, then we won't have to be sad.
Posted by Ramon | April 2, 2006 5:56 PM